Study of relationship between employees and employers

PART B: LECTURE 10-
MALAYSIAN INDUSTRIAL
RELATIONS
SEPTEMBER 2010

OVERVIEW
 INTRODUCTION
 INDUSTRIAL RELATIONS IN LOCAL CONTENT
 INDUSTRIAL HARMONY
 MINISTRY OF HUMAN RESOURCE
 3 MAJOR LAWS THAT GOVERN THE MALAYSI
INDUSTRIAL RELATIONS
 WHO NEEDS TO UNDERSTAND?

1. INTRODUCTION

1.1 INTRODUCTION TO SUBJEC
 Industrial relations/labour relations: study of relatio
between employees and their employers pertaining
employees employment or non-employment, terms
conditions of work, grounds of termination of emplo
etc.
 It also refers to the management of employees wel
internal communications.
 Industrial relations stresses the importance of 3 ma Relationship between employers and trade unions The framework provided by the employment laws Disciplinary procedures and termination of the employm
contract

1.2 DEFINITION
 Interaction between the employer and the
employee or the trade union in the work pla
 Its role is to strengthen the harmonious rela
between the employer and to avoid any form
exploitation and discrimination in the wo
or outside of the workplace.

1.3 INGREDIENTS IN AN INDUSTR
RELATIONSHIP
INDUSTRIAL
RELATIONSHIP
The employer
• Party that offers an
employment. Employer can
be individual, a company or
any type of organization or
society which has paid
employees for the job done
The employee
• People who accept an
employment offered by
the employer on terms
and conditions of service
agreed either verbally
or properly written in a
contract of service. An employment
• Employment can be full-
time job or part-time job
that agreed by both
employee and employer.

2. INDUSTRIAL RELATIONS IN LOC
CONTENT

INDUSTRIAL RELATION IN LOCAL CONTEXT

2.1 INDUSTRIAL RELATIONS SYST
IN MALAYSIA
 Is recognised as a tripartite system and is made up of 3 groups and Ministry of
Resources act as a president. His role is to oversee the overall development of
 Includes Employers and their organizations. Employees and their unions. Government.
 Machinery for discussion in tripartite system. National Labor Advisory Council (NLAC) which is made up of 14 representativ
employees, 14 from employers and 12 from government. Minister of Human Resources will chair the NLAC meetings and appoints the
representatives. Other representatives are appointed after consultation from Malaysian Empl
Federation (MEF), Malaysian Trade Union Congress (MTUC) and Congress of
Employees in Public and Civil Service (CUEPACS). Meeting is held twice a year or when there is urgency (eg: to approve amme
the law).

2.2 ROLE OF EMPLOYERS AND TH
ORGANIZATIONS
 Promote and protect the interest of their me
 To negotiate and deal with trade unions of
employees
 To represent their members in any trade dis
between an individual member and employe
union

2.3 ROLE OF EMPLOYEES AND TH
UNIONS
 An employee has a right under Section 4 of
Industrial Relations 1967 to join a trade unio
 Types of union Private sector Represented by Malaysian Trade Union Congress(M Issues include minimum wages for workers, cost of
foreign workers Public sector Represented by The Congress of Unions in The Publ
Civil Service(CEUPACS)

2.4 ROLE OF GOVERNMENT IN TH
INDUSTRIAL RELATIONS SYSTEMS
 Legislator through parliament
 Administrator- through the Ministry of Human Reso To protect the welfare of employees-safety, health and Promote good employer-employee relationship through
and peaceful Industrial Relations system To equip the unemployed with basic industrial skills and
improve the skill level of the workforce To assist in maximizing country’s manpower resources
manpower planning
 Participant- by being the largest employer in the co Employee in the public, private and government sectors

3. INDUSTRIAL HARMONY

3.1 DEFINITION
 Existence of a peaceful relationship between
unions representing Workers Workers’ employees

3.2 IMPORTANCE
 Increase productivity
 Attract more investment opportunities
 Help realizing Vision 2020
 Workers are more motivated and committed
 Prevent industrial actions from employees
 To promote the development of trade union
members and the employer to be democrati
responsible

 To promote and help voluntarily collective barg
between the employer and the employee relate
responsibility, working environment and other r
condition to uphold self interest of parties
 To promote the conducive working environmen
purposes of balancing dispute resolution and to
increase high productivity between the employ
the employee
 To cooperate with other interested agencies for
purposes of labour relation management
 To cooperate and to settle disputes towards pe
harmony

4. MINISTRY OF HUMAN RESOURC

4.1 SCOPE
 Encompass employee and workers state of s
health and welfare and human resource mat
such as training, employment, labor rights a
industrial relations.
 It includes the PERKESO (Pertubuhan Kesela
Sosial), PSMB (Pembangunan Sumber Manus
Berhad), JTM (Jabatan Tenaga Malaysia), JKK
(Jabatan Keselamatan dan Kesihatan Pekerja

4.2 ROLE & STRUCTURE
 Government’s overall goal in the area of Ind
Relations is to encourage harmonious relatio
between employers and employees in the in
of the nation’s productivity

4.3 OBJECTIVES
 To protect the welfare of the employees- saf
and rights
 To promote good employer-employee relatio
through a stable and peaceful Industrial Rela
system
 To equip the unemployed with basic industri
and to improve the skill level of the workforc
 To assist in maximizing country’s manpower
resources through manpower planning

4.4 DEPARTMENTS IN THE MINIST
OF HR
 Department of Labor, Peninsular Malaysia, Sabah and Sarawak-enforce
Employment Act 1955, Workmen’s Compensation Act 1952, Wages Cou
1947, Young Persons Act 1966, Employment Restriction Act 1968 and W
Minimum Standards of Housing & Amenities Act 1990. It also settles dis
between employers and employee over payment/non-payment of wage
retrenchment and retirement benefits.
 Department of Industrial Relations – administers Industrial Relations Ac
attempts to help settle disputes between employers and employees thr
conciliation.
 Department of Trade Unions – enforces Trade Union Act 1959 and play
in the growth of the trade union movement.
 Department of Occupational Safety and Health – enforces Occupationa
Health Act 1994 as well as Factories & Machinery Act 1967.
 Manpower department.
 Department of Skill Development.
 Industrial court.

4.5 3 MAJOR LAWS THAT GOVERN
MALAYSIA INDUSTRIAL RELATION
 Employment Act 1955. This act stipulates regulations covering all aspects of employment
Among provisions covered are termination, working hours, maternity and sick leave benefit
payments. The provisions aim to safeguard against exploitation by employers. The specific
including: To provide minimum benefits for those workers covered by the act. To establish certain rights for employers. To establish certain rights for employees.
 Industrial Relations Act 1967. This act regulates the relationships between employers an
through trade union including: To provide and encourages harmonious relation between employers and employees. To provide guidelines on collective bargaining between employers and employees. To establish procedures for settlement of trade disputes.
 Trade Unions Act 1959. This act establishes the responsibilities of trade unions and their To provide the rules on the right of employees to form, join and participate in any lawful trade union a To provide the rules on the right of employers to form, join and participate in any lawful employer’s as To establish and promote legislation affecting the interest of the trade union member.

4.6 ESSENTIAL SECTIONS OF
EMPLOYMENT ACT 1955
Notice of termination-< 2 years
-2-5 years
->5 years
-4 weeks
-6 weeks
-8 weeks
Annual Leave -1-2 years
-2-5 years
-more than 5 years
-8 days
-12 days
-16 days
Sick leave -< 2 years
-2-5 years
->5 years
-14 days
-18 days
-22 days
Termination, Lay Off &
Retrenchment
-< 2 years
-2-5 years
->5 years
-10 days
-15 days
-20 days
Retirement Benefits Subject to a maximum of 5 years services
Overtime Work Subject to a maximum of 104 hours services

Working on Rest Days -Payable at twice the normal daily basic wage or paymen
-Payable at twice the normal hourly rate
Maximum Hours of Work -5 consecutive hours with rest of at least 30 minutes
-Not more than 8 hours in 1 day
Maternity Leave -Maternity leave of 60 days (42-60) commencing any time within
from confinement,with the exception that she has been duly advised
doctor that her leave is required to begin within 14 days prior to
confinement
-After 60 days, she may apply to a total of 90 days
confinement(additional 30 days) without pay(non-pay leave) on
till to the 5thchild
-Earnings do not exceed RM1500 per month and all manual work
irrespective of their earnings
Public holiday -An employee shall be paid 2 days wages on any one of the 10 g
public holidays
-Any overtime work on any one of the chosen public holidays wil
at 3 times normal ordinary rate of pay

5. WHO NEEDS TO UNDERSTAND?

1.8 PEOPLE WHO NEEDS TO
UNDERSTAND THE THEORY AND
PRACTICE OF INDUSTRIAL RELATI
• To know their rights under the labor law, to be aware of benefits they c
joining a trade union, to understand that there may be certain risks ass
being a member to a union and they should know to whom they could
their employer fail to provide them with benefits provided under the law
Workers
• IR is important to managers because there is a direct link between profi
good industrial relations. Bad management will cause conflict, miscomm
negative attitudes, high turnover rates as workers leave to look for mor
workplaces else where. Productivity will be low amongst those who stay
be poor. Therefore good management is required for good industrial rel
avoid conflict, miscommunication, negative attitude etc
Managers

• They are often called upon to represent workers or
employees at the Industrial Court or at Labor Depa
hearings, High Court, Court of Appeals or Federal C
Lawyers
• To know how to play their role effectively so that w
will be protected from exploitation by greedy empl
Trade
Unions
Leaders
• They need to have strong working knowledge of
principles, concepts and laws so that they can ca
their job responsibilities well.
Officers &
Executives
in HR & IR
department